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Enlarge ImageRequest to buy this photoEric Albrecht | Dispatch file photo“Overdraft fees should not be ‘gotchas’ when people use their debit cards,” said Richard Cordray, director of the federal Consumer Financial Protection Bureau.

WASHINGTON — The fees that banks charge debit-card users who overdraw their accounts usually
cost more than the items being bought.

That’s the result of a study that the federal Consumer Financial Protection Bureau released
yesterday.

Large banks have generally charged a $34 penalty when people overdraw their accounts, even
though most of the purchases involved were for less than $24. And the penalties are charged even
though most accounts return to a positive balance within three days, the study found. Banks profit
by collecting more than half their checking-account income from these fees.

The study builds on a 2013 report that found that frequent overdrafters, on average, face $900
in additional costs each year.

“Overdraft fees should not be ‘gotchas’ when people use their debit cards,” said bureau director
Richard Cordray, a former Ohio attorney general.

The bureau is considering what protections might be necessary but has yet to outline specific
policy changes that could shield bank customers from these charges.

One area of concern for the bureau is that some banks process transactions by size instead of
the time of their purchase. This means that the banks prioritize large expenditures such as rent or
auto payments ahead of smaller purchases, possibly draining accounts such that buying a cup of
coffee can trigger an overdraft fee.

The study found that 75 percent of all overdraft fees come from 8 percent of bank customers.
Younger Americans who frequently use debt cards are more likely to be charged fees. More than 10
percent of accounts belonging to 18- to 25-year-olds are hit with at least 10 overdraft fees a
year. Thirty-six percent of accounts belonging to 26- to 45-year-olds face at least one fee.

Not surprisingly, the fees weigh mainly on people who use their debit cards more often. Nearly
half of bank customers with more than 30 debit transactions each month will pay one or more fees
each year.